Many institutions, particularly banking institutions, require Magnetic Ink Character Recognition (MICR) characters on many of their documents. MICR is a technology used to verify the legitimacy or originality of paper documents, such as checks, loan payment coupons, etc. Special ink, which is sensitive to magnetic fields, is used in the printing of certain characters on the original documents. The use of MICR characters enhances security and minimizes losses caused by some types of crime. If a document has been forged—for example, a counterfeit check produced using a color photocopying machine, the magnetic-ink line will either not respond to magnetic fields, or will produce an incorrect code when scanned using a device designed to recover the information in the magnetic characters. Even a legitimate check will be rejected if the MICR reader indicates that the owner of the account has a history of writing bad checks. Retailers commonly use MICR readers to minimize their exposure to check fraud. Corporations and government agencies also use the technology to speed up the sorting of documents.
When an individual (or company) opens a new account at a bank (or other institution), whether a checking account, or a loan (auto, personal, etc.), the institution may provide the individual with a small set (typically 8 to 12) of temporary checks, loan coupons, deposit slips, withdrawal slips, etc., with the MICR characters associated with their new account printed on the bottom. To print these temporary checks, the institution must own software that allows for printing of the MICR characters, and, special toner within a laser printer that will produce the characters with the necessary properties to be read by MICR readers. Such temporary checks are produced using pre-cut (or perforated) stock that is hand fed into a feed tray of a laser printer outfitted with MICR toner. One skilled in the art will appreciate that the labor and supply cost associated with producing a set of temporary checks (or loan coupons), as just described, has heretofore prohibited the institutions from providing more than a small number of checks (or loan coupons) to the customer. Rather, a small set of temporary checks are provided, leaving the customer to await shipment of their permanent checks (or loan coupon booklet). The institution will typically order the permanent stock from a check (or booklet) manufacturer. Such manufacturers utilize high volume printing and binding devices, which are too costly to be used by the institutions, much less by their local branches. Further, with every increasing labor costs, and rising postage rates, institutions have begun investigating alternative on-site production facilities.
However, as is more often the case, financial institutions use off-site print contractors for checks and loan coupons. That is, while they could use MICR document production software and toner, as described above, most do not have it. Thus, what they provide to customers are blank non-personalized counter checks, which most merchants will not accept. Thus, customers leave with almost useless temporary stock, and must wait for the off-site producers to provide them with permanent checks. The delay associated with this wait is a significant problem for the institutions.
The technology required for in-house production includes: personal computers, appropriate MICR software, and non-impact laser printers utilizing MICR toner cartridges. This technology has been available for several years. But, at least two significant barriers remain to be solved before the technology gains broad acceptance. More specifically: 1) cutting stock to size; and 2) binding (or unitizing) the stock into a pad or booklet. Companies that use MICR documents to facilitate financial transactions with their customers most often own laser printers. Typically such printers are of a design that uses individual sheets of paper, simply referred to as “cut sheet”, to produce finished documents. The process works well when full sheets of printed material are required. However, MICR documents do not require full sheets. Rather, MICR documents are of a smaller size, in most cases of a size similar to a personal check. Pre-perforated paper stock makes it possible to print multiples of the smaller items on a single sheet, which then may be separated into individual forms to create pages for inclusion in a pad or booklet. But, this has been less than a complete solution, because the manual process is labor intensive, slow, and tedious. And, perforated stock typically leaves rough edges, which are not as desirable as cut stock. Employees are required to separate or, in some cases, cut the paper that has been printed with the variable information into individual pages, stack the pages, jog the stack of pages into alignment, staple or affix the whole package together in combination with some sort of cover, and add a section of tape or through some such method cover the spine of the booklet or pad in a manner that will give it a finished appearance.
Applicant's have been in the business of providing MICR software, and MICR toner to banking institutions for a number of years. Long ago, they recognized the need for local branches to be able to provide a small set of temporary checks (or coupons) to the customer, at the time an account was created. However, they also recognized that a preferred solution would be for the local branch to produce greater quantities of temporary stock, as well as their own permanent stock of checks, or loan coupons, at the time of account creation. But as mentioned above, the current state of the art includes machines that are too costly, and made for too high a volume, to allow institutional branches to procure and utilize them locally.
Therefore, Applicant's have developed an apparatus and method to allow production of bound checks and loan coupons at local branches, in a cost effective and efficient manner. More specifically, what will be described below in the Detailed Description is an invention which allows a local bank to produce their own checkbooks, and loan coupon books (as well as other MICR documents), in sufficient quantity to satisfy its customers, with very little additional labor over the existing method of producing temporary checks, and with minimal investment. Moreover, the small booklet binding machine described below, in combination with a binder card of the present invention automates the cutting and binding tasks required to produce booklets into a simple 2-step operation that is simple, faster, and substantially less expensive than anything currently available.